Denver Health, Colorado’s primary safety net healthcare provider, is facing a critical financial situation. The escalating costs of uncompensated care have amounted to $140 million in the past year alone. Without additional funding, the health system will be forced to make significant cuts in services, causing delays in care and hindering necessary maintenance.
To address this pressing issue, Denver voters will have the opportunity to decide on a 0.34% sales tax increase on the upcoming Nov. 5 ballot. If passed, this measure is expected to generate approximately $70 million annually for Denver Health. The total sales tax in the city, including the state’s rate, would rise to 9.15%.
Denver Health CEO Donna Lynne cited the increase in uncompensated care costs, partly attributed to migrants transported to Denver from the southern border. The city and county government reported supporting over 42,000 migrants at a cost exceeding $72 million. This influx has put additional strain on the already burdened health system.
Established in 1860, Denver Health was separated from the city and county of Denver in 1996, transferring essential healthcare programs, services, and facilities to the state-created Denver Health and Hospital Authority. Despite an annual operating agreement with the city allocating $73 million, the health system has been struggling to meet its growing community needs.
In recognition of its improved operating performance, Fitch Ratings and S&P Global Ratings have affirmed Denver Health’s BBB ratings and stable outlooks. However, additional one-time funding of $5 million was passed by Colorado lawmakers this year to aid the health system. The authority’s last revenue bond issuance dates back to 2019 for refinancing debt and funding an outpatient clinic.
The critical financial situation faced by Denver Health requires immediate action. The proposed sales tax increase presents a viable solution to alleviate the burden of uncompensated care costs and ensure the health system can continue serving the community effectively. It is imperative for voters to understand the urgency of this situation and support increased funding for Denver Health on the upcoming ballot.